Commentary and analysis of commercial, business and intellectual property (IP) law, sports law, complex civil litigation and occasionally a general legal tip.

Thursday, March 7, 2013

Avoiding allegations of business interference.

Previously, I provided a list of little things you can do to help yourself from a legal perspective. The list was not principles to follow when a legal dispute arises, but before a legal dispute arises. That way, you will be prepared in the event of litigation. Being prepared for litigation is key to being successful in litigation. It is difficult for an unprepared client to become prepared once a dispute arises.

In that post, I noted that you should be careful about what you say regarding other people and businesses. If you make a third party break a contract with a competitor, you could end up as a defendant in a business interference suit. Business interference is an easy claim to assert, but a hard one to prove. The definition is broad, basically encompassing three scenarios:

Party A interferes with a contract between Parties B and C, causing Party C to not perform the contract.

Party A interferes with a contract between Parties B and C, causing Party B's performance of the contract to be more burdensome or expensive.

Party A interferes with a prospective business or contractual relationship between Parties B and C, causing Party C to not enter the contract or continue the relationship.

Even if you did not interfere with a contract or prospective business relationship, you may still get sued because of an assumption that you interfered. Defending a business interference case costs a lot of time and money. It is much easier to refrain from saying or doing anything that might even suggest business interference.

If you are accused of business interference but did not do anything wrong, you stand a good chance of winning the case. Improper motivation is a factor courts examine in determining whether a defendant is guilty of business interference. Even without improper motivation, being sued is a headache not worth having. It is better to refrain from talking about another person or business to a third party, regardless of how innocuous you think the comments may be.